Federal Energy Regulatory Commission (FERC) 841 Rule: Confronting Energy Storage Barriers

Source: GTM

BY PADMA EDIRSINGHE

According to 18 CFR Part 35 which was issued on Feb 15, 2018:

What is FERC 841:

FERC is amending its regulations under the Federal Power Act (FPA) to remove barriers to the participation of electric storage resources in the capacity, energy, and ancillary service markets operated by Regional Transmission Organizations (RTO) and Independent System Operators (ISO) (RTO/ISO markets).

Objectives of FERC:

FERC requires each RTO and ISO to revise its tariff to establish a participation model consisting of market rules that, recognizing the physical and operational characteristics of electric storage resources, facilitates their participation in the RTO/ISO markets. Participation models must comply:

1.  Ensure that a resource using the participation model is eligible to provide all capacity, energy, and ancillary services that the resource is technically capable of providing in the RTO/ISO markets;
2.  Ensure that a resource using the participation model can be dispatched and can set the wholesale market clearing price as both a wholesale seller and wholesale buyer consistent with existing market rules that govern when a resource can set the wholesale price;
3.  Account for the physical and operational characteristics of electric storage resources through bidding parameters or other means
4.  Establish a minimum size requirement for participation in the RTO/ISO markets that does not exceed 100 kW.

The New York Independent System Operator, Inc. (“NYISO”)

To comply with the directives of Order No. 841 Specifically, the NYISO proposes tariff revisions to establish a new participation model consisting of market rules for Energy Storage Resources or ESRs3 that, recognizing their physical and operational characteristics, facilitates their participation in the NYISO-administered Energy, Ancillary Services, and Installed Capacity markets. These rules include:

•   The qualification and registration requirements for Energy Storage Resources
•    The requirements for Energy Storage Resources’ participation in the NYISO-administered Energy and Ancillary Services markets;
•    The settlement rules for Energy Storage Resources
•    The requirements for Energy Storage Resources’ participation in the NYISO-administered Installed Capacity market.
•    The market mitigation requirements applicable to Energy Storage Resources
•    Other tariff revisions required to account for the physical and operational characteristics of Energy Storage Resources and the Order No. 841 compliance directives, including, for example, interconnection requirements.

Question here is: does NYISO adoption of FERC order 841 meet the FERC order 841 objectives? : That is removing the barriers or does it escalate more towards regulations?

Here is the forecast on annual Energy storage deployment

Conclusion:

While U.S. become the mecca for Energy storage Markets, FERC trying to overcome the barriers for the energy storage markets in US.

It is observed that markets being enabled by FERC Order 841, stronger growth in residential solar-storage systems, and an increasing number of state energy storage incentives and targets up and running, the U.S. is likely to regain its top position in 2019, with a projected 21 percent of global installations, followed by South Korea, China, Japan and Australia.

Sources:  NYISO, FERC, GTM, Wood Makenzie, Mila A, Bukner Esq., Hodgson Russ LLP